The state of California, with its stunning beaches, majestic redwoods, and…complex landscape of property taxes. The Golden State has experienced a significant demand in housing in 2023. This means that as a property manager, you have a wider scope of opportunities for your company. But property tax in California differ significantly from other states in the US. So, how do property taxes work in California? In this article, we will unpack the unique set of considerations you will have on your plate, if you have decided to step foot in the Californian fray. 

Proposition 13

Let’s start with the big one. Passed in 1978, Prop 13 set the base year value of a property to its 1975-76 value. Under this law, property taxes can’t exceed 1% of the property’s assessed value. This also means that property taxes can’t increase more than 2% annually, unless the property changes ownership or has undergone new construction. This is basically a cornerstone of CA property tax laws, and one that you should have a grasp on as a property manager. 

Reassessments

As discussed previously, if a property changes ownership or has recently undergone new construction, the property will have to be reassessed. So if you are managing properties that get sold pretty quickly or undergo frequent construction, be prepared for higher property taxes. 

Supplemental Tax Bill

Here’s the curveball. If there has been a recent change in ownership or new construction, after the property has been reassessed, the difference between the new and old assessment can lead to a supplemental tax bill. As a property manager, you need to stay alert about this as this can surprise many new homeowners. 

Local Add-ons

That 1% cap from Prop 13 that we discussed before? Well, local municipalities can add voter-approved debt rates for things like local infrastructure projects. So, be prepared if the actual rate is a smidgen over 1% in some areas. 

Homeowner Exemptions

Here’s a little silver-lining. Homeowners might qualify for a $7000 reduction in their property’s taxable value if it’s their primary residence. As a property manager, it would be a good idea for you to let your clients know about this. 

Tax Bills

In California, property taxes are paid in two installments. The first is due by November 1, and the second is due after February 1. Don’t let those dates slip through the cracks! 

To assist you in paying your taxes in a timely manner, ONR integrates features that notify you on time and allow you to pay your taxes easily through our property management software. This can be a gamechanger for you, no matter how many property units you are managing. 

Mello-Roos Taxes

In some communities, there might be additional taxes called the Mello-Roos. These are to fund infrastructure or services in those specific areas. As a property manager, you need to be aware if these taxes apply to the properties you are managing. 

Appealing Assessments

Sometimes, homeowners might feel that their property has been over-assessed. Being knowledgeable about the appeal process and deadlines can be incredibly helpful for you and your clients. 

Staying Informed

California’s property tax can be influenced by new local regulations. In order to succeed as a property manager and provide exceptional service to your clients, you need to stay informed about these updates. Stay connected with the State Board of Equalization to obtain up-to-date information about any developments that may affect your day-to-day tasks. 

Navigating property taxes in California can be a bit tricky. As a property manager you need to be prepared for any challenges that may come your way. With software like ONR, you can simplify property management for yourself and navigate through property taxes with ease. Visit our website now to learn more.